Cybersecurity

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Despite its unassuming name, the EARN IT Act has substantial cybersecurity implications, its relative obscurity in today’s coronavirus-obsessed headlines notwithstanding. The Eliminating Abusive and Rampant Neglect of Interactive Technologies (“EARN IT”) Act has already caught the ire of the collective internet and technology spheres due to its dramatic alteration of the safe harbor provisions of Section 230 of the Communications Decency Act (Title V of the Telecommunications Act Of 1996). Although still in the early stages of the legislative process, curbing Section 230’s protections has already garnered substantial support from leaders in both parties, including Joe Biden and Ted Cruz. Therefore, EARN IT’s progress merits close monitoring.
Continue Reading Putting in the Work: What Does the EARN IT Act Have in Store for Average Businesses

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Most companies that can do so have sent their employees home to work, which means that many employees have brought their home to work. Businesses have transitioned from maintaining a centralized workplace with a standardized data security protocol managed by knowledgeable IT personnel to a decentralized system of home offices with uneven or unenforced data security policies, largely managed by end users with minimal or no technological expertise.

Consequently, companies have been forced to introduce into their system the very vulnerabilities that they normally spend substantial time and money trying to eliminate. These vulnerabilities present a compliance issue for companies legally required to keep certain information confidential–such as health providers, law firms, or defense contractors–and for those otherwise subject to regulatory oversight. A confidentiality breach therefore presents a legal risk as well as a business risk, so companies must address squarely the data security implications of a home-based workforce.
Continue Reading Working From Home Data Security Tips, Part 2

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The videoconference platform Zoom has seen a surge in users since the coronavirus pandemic. Teleworkers are relying increasingly on Zoom for virtual meetings, and as a HIPAA-compliant videoconferencing program, Zoom for Healthcare has gained popularity among healthcare providers in particular. New York’s Attorney General has asked Zoom to explain its privacy policies, and additional scrutiny is likely to follow.

Hackers have noticed. Since the beginning of the year, reports show 1,700 registrations including the word “Zoom,” with 4 percent containing suspicious characteristics. A click on a fake Zoom invitation could install InstallCorePUA, which opens the door to malicious software installations.
Continue Reading Working From Home Data Security Risks

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Bad actors love crises. The forced telecommuting of millions of employees (and the attendant exponential increase in use of remote access technologies), coupled with real fears and concerns regarding the spread of COVID-19, have produced a fertile environment for an increase in cyberattacks. Trend Micro reports that COVID-19 is being used in a variety of malicious campaigns including email spam, business email compromise (i.e., using stolen information to initiate fraudulent wire transfers), malware, ransomware, and malicious domains. Trend Micro estimates that nearly 66% of these attacks involve email spam. Both Trend Micro and Sophos have separately reported discovery of what Sophos calls a “dirty little secret” scam: users receive an email asserting that the sender knows their whereabouts and other personal information, and threatens that if the user refuses to pay a fairly large sum ($4000 in one instance), they will infect your family with coronavirus. Nasty, eh?

With this increased risk environment, and everyone’s guard down a bit as we focus on simply trying to keep doors open, it is important for those responsible for data security to undertake basic steps to lessen the success of these attacks. These steps can include:
Continue Reading Strengthening Your Cybersecurity in the Age of the Coronavirus

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We regularly work with financial institutions to navigate the challenges of implementing, maintaining, and using security procedures for commercial customers’ use of treasury management services. Security procedures are an integral part of the relationship between the financial institution and its commercial customers. Financial institutions offer (and frequently require) commercial customers to use the institution’s security procedures, which are agreed to be commercially reasonable, to originate payment orders (e.g., wire transfers and ACH Entries) from the customers’ accounts.

Issues often arise when one or more of a customer’s authorized users is not able to use his standard security procedures to access a financial institution’s physical or electronic payments systems to either originate or confirm a payment order. Due to the COVID-19 outbreak and concern over the implementation of preventative measures, including more companies asking or requiring employees to work remotely, financial institutions should consider which customers may need to update, amend or supplement the ways that its customers can make payments, whether this be through adding authorized users or implementing alternative methods to send payment orders.
Continue Reading Considerations for Financial Institutions Regarding Security Procedures for a Remote Workforce

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On January 27, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) issued a statement designed “to assist market participants in their consideration of how to enhance cybersecurity preparedness and operational resiliency.” Companies regulated by the SEC, or organizations that work with companies the SEC regulates, should review OCIE’s observations of best practices and consider whether they are meeting OCIE’s expectations.

OCIE’s observations fall into several categories.

Governance and Risk Management. As OCIE notes, “[e]ffective cybersecurity programs start with the right tone at the top . . . .” OCIE also notes that effective programs include, among other things, (i) a risk assessment of cybersecurity threats; (ii) written cybersecurity policies and procedures to address said risks; and (iii) implementation and enforcement of those policies, including testing and monitoring and continuous evaluation of those policies.
Continue Reading SEC Issues Statement on Cybersecurity and Operational Resiliency

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On February 20, the United States District Court for the District of Columbia ruled that a law firm must defend against a malpractice claim grounded in a data breach it suffered during a cyberattack.

In this case, the plaintiff, Guo Wengui, alleged that he was a well-known Chinese dissident who had exposed systemic corruption and widespread human rights abuses by the Communist Party of China (“CCP”), China’s ruling political party. Following this exposure, the plaintiff alleged, persecution from the Chinese government drove him to seek political asylum in the United States. The plaintiff further alleged that the Chinese government continued its persecution of him even after his arrival in the United States. This persecution allegedly involved the coordination of a “malicious negative propaganda campaign” against him, including the coordination of a demonstration outside his home.
Continue Reading Law Firm Malpractice Decision Teaches Cybersecurity Lessons

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The United States District Court for the District of Maryland recently held that an insurer must cover an insured’s costs to replace its computer systems following a ransomware attack. The case, National Ink and Stitch, LLC v. State Auto Property and Casualty Insurance Company, Civ. No. SAG-18-2138 (D. Md. January 23, 2020), contains lessons for business and insurance companies going forward.

Plaintiff, an embroidery and screen printing business, obtained a businessowner’s insurance policy from the defendant, State Auto. The policy provided that State Auto “will pay for direct physical loss of or damage to Covered Property at the premises described in the Declarations caused by or resulting from any Covered Cause of Loss. The policy defined “covered Property” to include “Electronic Media and Records (Including Software).” It further defined “Electronic Media and Records” to include “electronic data processing, recording or storage media [and] data stored on such media.” 
Continue Reading Maryland Court Orders Insurance Company to Pay Ransomware Damages Under Businessowner’s Policy

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Recent ransomware attacks illustrate the importance of compliance with the HIPAA required and addressable security standards. In its December 2, 2019 Fall 2019 Cybersecurity Newsletter, the Office of Civil Rights (OCR) discussed ransomware attacks and ways to recognize, prevent, mitigate and recover from an attack.

HIPAA requires both covered entities and business associates to conduct a risk analysis of the potential risks and vulnerabilities to the security of electronic Protected Health Information (ePHI) and to implement a corrective action plan to eliminate or reduce those risks and vulnerabilities. According to the OCR, these risk analyses are critical to preventing ransomware attacks because ransomware takes advantage of technical vulnerabilities. HIPAA also requires an effective procedure for information system activity review. This enables the covered entity or business associate to identify unusual activity and quickly identify an attack. The information system review should include procedures, such as audit logs, incident and breach tracking reports, and reports on system access. 
Continue Reading Cybersecurity Attacks: The Importance of Compliance With the Standards